The growing Indian economy offers opportunities for international entrepreneurs, but several factors must be considered. Learning how to export to India – just like learning to export to any country – requires gaining knowledge of the specific rules, regulations, and laws applicable to the destination in order to work better with your customer who will be importing the goods.
Paperwork
Exporting requires dealing with two bureaucracies – the exporting nations and the importing nation’s. Bureaucracies thrive on paperwork. A smooth export experience requires complete and correct paperwork, and clear lines of communications with the customer to ensure all import brokerage arrangements are in place. Do your research. Your choice or your customer’s choice of import broker should be able to assist in this area.
Shipping
Exporters typically use one of four transportation options when shipping overseas: Ocean Freight is the least expensive option for bulk goods, but the transit time from the origin point to destination point can range from 25 to 45 days. Often in today’s international business environments, ocean freight lead times are not a viable option to deliver time-sensitive orders to the customer. Air Freight from origin to destination continues to be a key element of delivering goods to customers throughout the world, including India. Depending upon the size of the shipment, parcel express via one of the top three carriers (Fed Ex, DHL, or UPS) is the best option. For product shipments that are larger than parcel carriers accept, heavy-weight air freight options are available through freight forwarders such as FedEx Trade Networks, DHL Global Forwarding, or many other reputable companies that have experience moving goods to and from India. It is always recommended to work with freight forwarders and import brokers that offer the guidance needed to ensure you comply with India’s import requirements. NEI is accustomed to working with our customers and our preferred freight forwarders to ensure the process runs as smoothly as possible. If you have the resources and knowledge to arrange your own shipping, you don’t need our help.
Couriers such as FedEx, DHL, or UPS cannot do customs clearance on some shipments to India. Restrictions apply to:
- Items weighing more than 32 kgs
- Items values at more than $1500 US
- Restricted items subject to license or permit requirements
- Antibiotics and Pro-vitamins
Items falling into the categories above must enter India using Formal Clearance Freight mode requiring the importer to appoint a customs broker for clearance. FedEx, DHL or UPS can be appointed as the customs broker for the shipment, but a formal selection must be made and the appropriate paperwork filed. The importer in India must also be properly registered with India Customs with and Importer-Exporter Code (IEC) and a Business Identification Number (BIN) to properly complete the import process. Freight forwarders and broker cannot be the importer of record, therefore, working closely with the customer before the order is booked to acquire the proper information for the import broker and freight forwarder is key to success.
Duties and tariffs
Tariffs and duties may apply to your product. These are subject to change due to economic and political factors, so it is best to investigate before shipping. India’s duty and tax structure for imported goods have become better in recent years, but the wide variety of product classifications creates a complex and often confusing situation when estimating the total landed cost. Most imports experience between a 2% to 10% duty rate on imported items, and import tariffs (taxes) that range from 0% to 40%, but could go higher. The average tariff rate for telecommunication equipment in August 2011 was 26%.
NEI has experience exporting technology products to India. We can help ISVS and others take advantage of the growing Indian marketplace. To learn more about how to export to India, contact NEI.